The main factor behind the drop is falling incomes and increases in credit impairments, the Scandinavian-owned Swedbank said.

Swedbank has approved nearly 7,000 grace period applications on loans, in the wake of the coronavirus pandemic and its economic effects, to present, totaling €162 million.

1,300 companies have also received grace periods, with the total amount of deferred loan payments coming in at around €50 million on a total loan volume of €821 million.

Credit impairments amounted to €5.5 million in Q1, compared with a positive result of €200,000 in the same period in 2019; again this is mainly driven by worsened macro scenarios and additional provisions arising from the pandemic.

Swedbank income, gains, losses and expenses details, on year to Q1 2020.

• Net income up 7 percent due mainly to increased lending volumes totaling 5 percent.
• Deposits also rose by 7 percent on year.
• Net commission income fell 11 percent as a result of reduced net income on bankcard payments, and lower maintence fee rates for the second pillar of the Estonian pension system, membership of which is now optional.
• Net gains and losses on financial items fell by €4 million, mostly due to revaluations of assets.
• Other income fell 2 percent, primarily the result of lower insurance income.
• Total expenses increased by 4 percent, mainly due to higher staff-related costs, the cost of strengthening anti-money laundering and know your customer procedures, and external consultation expenses.

"We are a well-capitalized bank and can, therefore, be sufficiently flexible to provide grace periods and, if necessary, new loans to our customers. Our main goal is to enable companies and people to put this crisis behind them with a few negative economic effects as possible. We work on this with entrepreneurs and the public sector every day," said Olavi Lepp, Head of Swedbank Estonia.

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